Florida Senate - 2018                        COMMITTEE AMENDMENT
       Bill No. SB 1866
       
       
       
       
       
       
                                Ì647458QÎ647458                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  02/20/2018           .                                
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       The Committee on Banking and Insurance (Broxson) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsection (6) is added to section 627.072,
    6  Florida Statutes, to read:
    7         627.072 Making and use of rates; qualified shared
    8  underwriting result participation programs.—
    9         (6)(a) As used in this subsection, the term:
   10         1. “Base workers’ compensation insurance policy” means a
   11  workers’ compensation insurance policy that is subject to this
   12  part.
   13         2. “Qualified insured” means an insured that has its
   14  principal place of business in this state and has an estimated
   15  annual countrywide workers’ compensation standard premium of at
   16  least $500,000.
   17         3. “Qualified insurer” means an insurance company that:
   18         a. Is authorized to transact insurance in this state;
   19         b. Had a combined ratio of less than 100 percent on January
   20  1 of each of the 2 preceding years for its nationwide book of
   21  workers’ compensation insurance business;
   22         c. Has a surplus in excess of $500 million on January 1 of
   23  the year in which the base workers’ compensation insurance
   24  policy is issued; and
   25         d. Has a rating of A+ from A.M. Best Company or an AA
   26  rating from Fitch Ratings.
   27         4. “Qualified reinsurer” means a reinsurer that:
   28         a. Is an affiliate of, is controlled by, or is under common
   29  control of a qualified insurer; and
   30         b. Is a reinsurer where credit for its reinsurance is
   31  allowed under s. 624.610(3).
   32         5. “Qualified shared underwriting result participation
   33  program” means an offering that:
   34         a. Is issued to the same insured in connection with a base
   35  workers’ compensation insurance policy;
   36         b. Is effected through a separate agreement with a
   37  qualified reinsurer;
   38         c. Provides that the insured may participate in the
   39  underwriting profit or risk that is associated with the base
   40  workers’ compensation insurance policy issued to that insured
   41  and that is maintained in a segregated cell account;
   42         d. Contains a minimum and maximum loss participation limit;
   43         e. Discloses the duration of the program;
   44         f. Discloses penalties, if any, for the early termination
   45  of the program;
   46         g. Provides an estimated schedule of payments;
   47         h. Discloses the methodology for calculating charges,
   48  deposits, or other payments due, including the frequency of
   49  adjustments; and
   50         i. Discloses how any disputes between the parties will be
   51  resolved.
   52         (b) An application or proposal for a qualified shared
   53  underwriting result participation program with a term longer
   54  than 1 year must clearly disclose the term duration in at least
   55  14-point type.
   56         (c) If a qualified insurer in this state issues a base
   57  workers’ compensation insurance policy on an approved form and
   58  with approved rates to a qualified insured, a qualified shared
   59  underwriting result participation program form must be filed
   60  with the office for informational purposes only. The qualified
   61  shared underwriting result participation program form does not
   62  require approval under s. 627.410.
   63         (d) A qualified shared underwriting result participation
   64  program may be issued to a qualified insured in connection with
   65  a base workers’ compensation policy issued by a qualified
   66  insurer.
   67         (e) Charges, deposits, or other payments agreed to by a
   68  qualified insured and a qualified reinsurer pursuant to a
   69  qualified shared underwriting result participation program are
   70  not subject to this part.
   71         (f) A qualified insurer must comply with ss. 440.41 and
   72  440.42 in connection with a base workers’ compensation insurance
   73  policy.
   74         Section 2. This act shall take effect July 1, 2018.
   75  
   76  ================= T I T L E  A M E N D M E N T ================
   77  And the title is amended as follows:
   78         Delete everything before the enacting clause
   79  and insert:
   80                        A bill to be entitled                      
   81         An act relating to workers’ compensation shared
   82         underwriting result participation programs; amending
   83         s. 627.072, F.S.; defining terms; specifying
   84         disclosure requirements for applications or proposals
   85         for certain qualified shared underwriting result
   86         participation programs; requiring, under certain
   87         circumstances, a qualified shared underwriting result
   88         participation program form to be filed with the Office
   89         of Insurance Regulation, for informational purposes
   90         only, and providing that such form is not subject to
   91         certain approval; providing that a qualified shared
   92         underwriting result participation program may be
   93         issued to a qualified insured in connection with a
   94         base workers’ compensation policy issued by a
   95         qualified insurer; providing that the Rating Law does
   96         not apply to certain charges, deposits, or other
   97         payments in a qualified shared underwriting result
   98         participation program; requiring qualified insurers to
   99         comply with specified provisions of the Workers’
  100         Compensation Law; providing an effective date.